How People Make Judgments and Decisions

When young James Heyman was in grade school, one of his peers asked the teacher if he could chew gum in class. The teacher said it was permitted as long as she didn’t notice. The precocious Heyman asked how that was any different from not being allowed to chew gum and was promptly sent to the principal’s office.

Some years later, and with a few more years of school under his belt, Dr. Heyman now researches how people make judgments and decisions. He studies how they collect information, interpret it, and why they apply data that has no diagnostic information, throwing away perfectly good information in favor of non-diagnostic data. It seems he was destined from a young age to study human behavior regarding information and decision-making.

Dr. Heyman received a bachelor’s degree from Macalester in Economics & Mathematics, a master’s from the Naval Postgraduate School in Applied Mathematics with a specialty in Space Systems Engineering, and a PhD from U.C. Berkeley in Business Administration in Marketing. If this academic course confuses you, you’re not alone. Dr. Heyman explained the unorthodox path to a PhD in business in this way:

While working on my second degree I received a very bad head injury in a ski accident: concussion, antero and retro grade amnesia, diminished cognitive capacity. I asked the cognitive psychologist who was treating me whether I was going to remember or relearn. He said that was the $64 question and from then on I’ve been interested in how people think about things, solve problems, and make decisions.

Dr. Heyman’s most renowned article, “Effort for payment: A Tale of Two Markets,” explained incentives and how they impact human behavior. He elaborated, “It’s better to pay nothing rather than a small amount of money. However, if you’re paying in something other than money then it doesn’t matter how much you pay, you will get the same high level of effort from the person.”

This article has been cited over 100 times, was included in a book of advances in behavioral economics, was mentioned in Business Week, and even made it into a management self-help book.

Recently, Dr. Heyman overheard one of his students describe him thus. “He’s an incredibly hard teacher but a comparatively easy grader. For half the semester you’ll think he’s a nut job but by the end of the semester you’ll realize that you’ve learned more than in any other class.”